Question
In: Economics
Consider a representative firm with the total costs of TC=16+Q^2 (and marginal costs of 2Q, MC=2Q)...
Consider a representative firm with the total costs of TC=16+Q^2 (and marginal costs of 2Q, MC=2Q) . The market demand curve is given by P=36-1/2Q and the starting market price is $18
1. Graph the starting scenario using comparative statistics
2. Why is this not a long run equilibrium?
3. What happens in order to transition to the long run?
4. Graph the long run equilibrium using comparative statistics
5. How many firms are in the market in the long run?
Solutions
Expert Solution
In long run equilibrium, there is no economic profit. This is because, more firms enter the market shifting the supply curve to the right, thereby lowering the prices.
The price is determined where the Average Cost is minimum or Average cost is equal to the Marginal Cost.
Rahul Sunny answered 7 months agoRelated Solutions
Consider a firm with total costs represented by TC=16+Q^2 and a corresponding marginal cost of 2Q...
Consider a firm with total costs represented by
TC=16+Q^2 and a corresponding marginal cost of 2Q
(MC=2Q)
1). Graph the ATC and MC, be certain to label the lowest point
of the ATC.
Consider that firm faces a price of 12$.
2). Find the optimal quantity.
3). Graph and find the total cost, total revenue, and any profit
or loss at the optimal quantity.
Consider a firm with total costs represented by TC=16+Q^2 and a corresponding marginal cost of 2Q...
Consider a firm with total costs represented by TC=16+Q^2 and a
corresponding marginal cost of 2Q (MC=2Q)
1. Graph the ATC and MC, be certain to label the lowest point of
the ATC.
Consider that firm faces a price of 12$.
2. Find the optimal quantity.
3. Graph and find the total cost, total revenue, and any profit
or loss at the optimal quantity.
Consider a firm with total costs represented by TC=16+Q^2 and a corresponding marginal cost of 2Q...
Consider a firm with total costs represented by TC=16+Q^2 and a
corresponding marginal cost of 2Q (MC=2Q)
1. Graph the ATC and MC, be certain to label the lowest point of
the ATC.
Consider that the firm faces a price of $12.
2. Find the optimal quantity
3. Graph and find the total cost, total revenue and any profit
or loss at the optimal quantity
Consider a firm with total costs represented by TC=8+1/2Q2 and a corresponding marginal cost of Q(MC=Q)...
Consider a firm with total costs represented by
TC=8+1/2Q2
and a corresponding marginal cost of Q(MC=Q)
1) Graph the ATC and MC, be certain to label the lowest
point of the ATC
Consider that the firm faces a price of $10
2) Find the optimal quantity
3) Using the ATC/MC graph, find and diagram, the total cost,
total revenue, and any profit or loss at the optimal quantity.
4. Consider a firm with total cost: TC = 200 +2q + 4q2, where q is...
4. Consider a firm with total cost: TC = 200 +2q + 4q2, where
q is output. (Decimals OK!)
a.[1] Is this a Short Run or a Long Run Total Cost function?
Explain how you know.
b.[3] Find the equations for Marginal Cost, Average Total Cost
and Average Variable Cost.
c.[2] What is the minimum efficient scale of production for
this firm?
d.[1] Over what quantities does this firm exhibit diseconomies
of scale?
e.[4] If this represents the cost curve...
1. Demand: P=120-Q Total Cost: TC=Q2 Marginal Revenue: MR=120-2Q Marginal Cost: MC=2Q What is the amount of profit...
1. Demand: P=120-Q Total Cost:
TC=Q2
Marginal
Revenue: MR=120-2Q Marginal
Cost: MC=2Q
What is the amount of profit for this monopolist?
2. Demand:
P=120-Q Total
Cost: TC=Q2
Marginal
Revenue: MR=120-2Q Marginal
Cost: MC=2Q
For this monopolist, the profit-maximizing price is ________ and
the profit-maximizing quantity is _________.
3. Demand:
P=120-Q Total
Cost: TC=Q2
Marginal
Revenue: MR=120-2Q Marginal
Cost: MC=2Q
Compared to perfect competition where P=MC, what is the amount
of deadweight loss caused by this monopolist _________.
Consider a monopolist with a total cost of TC=9+Q and marginal cost of $1 (MC=1). The...
Consider a monopolist with a total cost of TC=9+Q and marginal
cost of $1 (MC=1). The monopolist faces a demand curve of
P=11-Q.
1. Graph the monopolist
2. Find price and quantity that the monopolist charges.
3. Find the profit and consumer surplus.
4. Find the deadweight loss to welfare.
Consider the following demand, TC, MC and MR equations: P=56-Q TC=3Q2+20 MC=6Q MR=56-2Q What is the...
Consider the following demand, TC, MC and MR equations:
P=56-Q
TC=3Q2+20
MC=6Q
MR=56-2Q
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What is the price set by the monopolist?
What is the quantity set in perfect competition?
What is the price set in perfect competition?
Draw the demand and supply graph. Include and label
appropriately the marginal revenue curve, and indicate the
equilibrium in perfect completion and in monopoly.
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Consider a firm whose total costs are given by TC(q) = 300 + 6q + 3q2....
Consider a firm whose total costs are given by TC(q) = 300 + 6q
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a) What is the minimum price at which the firm will produce
positive output?
b) What is the firm’s supply curve? If there are currently 300
firms in the market, what is the market supply curve?
c) The market demand for this firm’s product is QD = 10800 -
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quantity?
d) Given the equilibrium you...
Consider a monopoly firm that faces the following demand curve, total cost curve, and marginal cost: P(Q) = 120 – 4Q; TC(Q) = 400 + 4Q; MC = 4
Consider a monopoly firm that faces the following demand curve,
total cost curve, and marginal cost: P(Q) = 120 – 4Q; TC(Q) = 400 +
4Q; MC = 4a. What is the marginal revenue (MR) equation?b. Determine the profit maximizing level of production for this
monopolist.c. What is the price that the monopolist will charge at the
profit maximizing level of production?d. What is the monopolists’ profit at the profit maximizing
level of output?e. Suppose the government regulates the industry...
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